Market Update – July 25 – FED & Tech Giant Earnings Week

USDIndex pushed under 106.00 on Friday (closed at 106.50) as the US Services sector contracted for first time in 2 years. US Stocks sank into close (NASDAQ -1.87%), big declines for tech companies, led by a -39% for SNAP. Asian markets also negative to start the week, (Hang Seng -1.18%, Nikkei -0.79%). European FUTS lower too. Yields tanked to closed down -4.74%. Oil under $94, Gold under $1725 and BTC under $22k. High Inflation, rising Interest Rates and weak Consumer and Business Confidence continue to weigh on sentiment. The CME “FedWatch Tool”¹ still has a 21.3% chance of a 100bp rate hike on Wednesday. Russia & Ukraine signed agreement to allow grain exports to start but then Russia shelled Odessa, UK PM race is getting increasingly bitter and Lavrov is on a tour of Africa.

Week Ahead – FED Rate Decision, US GDP and Earnings Season sees the technology giants (APPL, AMZN, MSFT, GOOGL & META) plus many more companies all reporting Q2 data.

USDIndex up from lows at 105.96 on Friday (US Services PMIs big miss and into contraction at  47.00 vs 52.7) now trades at 106.60.
EquitiesUSA500 closed -0.93% -37pts (3961), (week +2.4%). US500FUTS at 3958 now. SNAP +39.04%, TWTR +0.8%, (Earnings not as bad as expected), AMEX +1.9% (Earnings beat & increased Revenue forecast) Verizon -6.8% (Profits cut) META -7.6%, GOOGL -5.6%.
106 companies have reported; 75.5% have beat estimates (average for last 4 quarters 80% beat.) Strong Dollar hindering. 
Yields 10-year yield significantly lower at 2.783%, trades lower again at 2.75% now. 
Oil & Gold had volatile & weak sessions last week – USOil traded from over $102 support down to $94.15 lows, and is lower again today at $93.00. OPEC next meet Aug 3. Gold fell to $1680 lows last week but recovered $1700 and trades back to $1725 now.  
Bitcoin rallied to $24K, last week, breaking away from the $20k level but is back to $21.8K today 
FX MarketsEURUSD remains pressured but rotates at 1.0200, USDJPY down to test 135.50  last week – now 136.30. Cable breached the key 1.2000 last week, trades at 1.1990 now. 

Overnight – 

Today – German Ifo Survey, UK CBI Trends, US National Activity Index, Earnings from Ryanair, Philips, Vodafone, Infosys, Newmont and NXP Semiconductor. 

Biggest FX Mover @ (06:30 GMT) USDCHF (+0.40%). Rallied from a test under 0.9600 on Friday to 0.9645 now next resistance 0.9658 & 0.9675. MAs aligned higher, MACD histogram negative but rising, RSI 52 & rising, H1 ATR 0.00125, Daily ATR 0.00800.


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Stuart Cowell

Head Market Analyst

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